FHL - the final instalment

[greenbarn]

I'm on the distribution list for the campaign by Winterrule, and have just received this. For those not on the list, it's interesting reading:

Dear all

On Tuesday 19 July the Finance Bill received Royal Assent and so the furnished holiday letting changes are now finally on the statue book and are law.

As a result of all the lobbying activity over the last two years, the result has been a restriction of loss relief, an increase in the day count limits and confirmation of the extension of the rules to properties within the European Economic Area. The loss relief restriction is already in place for the current tax year but the increase in the day count limits does not take place until April next year.

The new day count limits will be that a property must be available for at least 210 days in a year and actually let for 105 days in that year. The government has also acknowledged our concerns over the potential impact of these higher qualifying limits by introducing a period of grace in which the limits do not have to be met. In a nutshell, the actual letting requirement only needs to be met once in every three years as long as the property is actually available for the 210 day letting period and there is a genuine intention to let. It is important that you appreciate and understand how this new framework applies especially for multiple unit operators who are also applying the averaging rule.

We have been continuing to work with HMRC on the preparation of further guidance and a new helpsheet is being prepared. However it is also important that you fully consider your own position and take good advice. Specifically whether or not your business may actually qualify as a trade in its own right or whether in certain cases you would be better off not coming within the furnished holiday let rules but instead just be taxed as a normal property business.

I have just finished a tax technical article for the Tax Journal for the Finance Act edition on the relevant changes and we will post this onto the dedicated page on our website once this is published. For completeness the link to the rural tax campaign on our website is as follows www.winterrule.co.uk/rural-tax-campaign/. I am also writing a book on the furnished holiday letting rules which is aimed at accountants and other professional advisors and this should be published later this year.

One of the concerns about the changes to the rules would be the impact on the more peripheral locations within the UK. So far this year our experience has been that the increase in fuel prices is already hitting outlying areas with holiday destinations closer to the main population areas in the UK maintaining, or increasing, their trade at the expense of more remote locations. The petrol costs are simply too high for cash strapped families. The summer weather has also been disappointing which is not helping! We are continuing to monitor the self-catering trade and are trying to produce some meaningful statistical reports on occupancy levels.

[charles cawley]

This is very useful. Thank you.

[Nightowl]

yes it is VERy useful, thanks for posting.

I always have to try and explain the rules to my accountant and it's best done if I can lead him to some published legislation....other than that on the HRMC website....

thankeee kindly

[Windy]

I always have to try and explain the rules to my accountant and it's best done if I can lead him to some published legislation....other than that on the HRMC website....

Ditto - I do wonder who should be paying who sometimes

[greenbarn]

I always have to try and explain the rules to my accountant and it's best done if I can lead him to some published legislation....other than that on the HRMC website....

Ditto - I do wonder who should be paying who sometimes

Sounds like the book John Endacott's writing could turn into an overnight best seller.

[Nightowl]

yea, last time I met with him he was saying that I had to be careful about the qualifying lettings limits, particularly for my spanish house and i said to him that I understood there would be a grace period and some leeway on this but he wasn't convinced.